The Morals of Money—How to Build a Sustainable Economy and Financial Sector

Table of contents

Moral DNA

In 2008, we constructed and published the ethicability® Moral DNA Test to understand how people prefer to make moral decisions. Between July and August 2008 over 20,000 people from 162 countries completed the test, which was supported by Cass Business School, PricewaterhouseCoopers, and The Times in London.

Those who work in financial services scored lower than average, indicating greed, fear, or moral immaturity. But the test measures not just our overall ethics score compared with others, it also describes how we make moral choices based on three moral dimensions: Rule compliance, social conscience, and principled conscience.

Rule compliance means obedience and is the first conscience we develop as young children. Don’t think—just do as you’re told—or else. Social conscience means altruism and is based on the idea that doing the right thing is doing what’s best for others. This part of our conscience appears to be almost fully developed by the time we are in our teens. Finally, principled conscience means character or virtue. Doing the right thing is about making decisions based on how we apply principles such as courage, fairness, and honesty to the choices we make. This appears not to develop fully until we are in our late 50s.

When things go wrong, the response of governments and regulators is to treat us like children and try to change behaviors by devising even more rules and regulations. But the test results clearly demonstrated that this only serves to increase the risk of more wrong-doing, as it means people take less personal responsibility for their actions. Instead of bothering with this, they will simply check if it’s okay with compliance or HR.

Then, if things do go wrong, they don’t blame themselves, but blame the system or the market. The response of government and regulators to wrong-doing has been to add ever-increasing volumes of rules and regulations that tell us what’s right and how to behave. We can no longer be trusted to know what is right or, indeed, to do it. We have to be told.

If we do the right thing, we are rewarded. But if we do the wrong thing—and get caught—then we are punished. And, if the transgression is newsworthy enough to get the attention of politicians, we will get even more rules, structures, and processes to tell us what’s right.

It is my experience that in order to do the right thing in any organization, people have to have the following:

a clear and moral purpose

a clear set of moral values that guide behavior

leaders who set a personal example consistent with these values

a living community of employees, customers, suppliers, shareholders, and others, in which people will able to resolve together the inevitable challenges and conflicts which are faced in every endeavor

They will be guided by the values of the organization, the personal example of their leaders, and a shared approach and framework to ethical decisions. This approach should permeate every human aspect of business from recruitment, through training, appraisals and rewards.

The challenges that we face today in business are not economic, social, or political—they are ethical challenges that demand a more mature response. Moral grown-ups in business don’t need others to tell them what’s right, they ought to be trusted to discuss it and work it out for themselves. A great customer proposition is not delivered in the form of complex rules and procedures; it is delivered by mature adults who really do care about other people and the quality of goods and services they buy.

But the greatest challenge of all will be to confront the brutal truth that our current assumptions about economics are fundamentally flawed. This planet that we all share is a closed ecosystem with finite resources. Yet the other assumptions we make are that human beings have unlimited wants; that growth is good; that we can all strive for what we want rather than what we need.

This economic philosophy of growth for its own sake is as bankrupt as the philosophy of the cancer cell. “Homo economicus” is riddled with malignant growths. We need to re-discover the philosophy of “homo sapiens.” We need to find the wisdom to confront this awful truth; and then deploy our intelligence to find a new and sustainable model of moral capitalism, founded on a moral financial sector where trust is the ultimate reserve currency.